The number of people starting an apprenticeship has fallen by almost two thirds since the introduction of the Apprenticeship Levy earlier this year.
According to research from the Federation of Small Businesses (FSB), there was a 61% drop in apprenticeship take-ups in the period April to June 2017 compared with the same period in the previous year, with the figure slipping from 113,000 to 43,600. The number aged under 19 starting apprenticeships for the same period also fell by more than 40%.
The levy, which hands all companies a £15,000 allowance but forces firms with a wage bill in excess of £3m to pay a 0.5% wage bill fee, was introduced on 1 April, with the FSB’s research also finding that in the three months prior to its introduction apprenticeship starts were up 47% on the previous year, from 118,800 to 174,100. Overall apprenticeship starts for the academic year 2016/17 were down 2.5% on the previous year.
While there have so far been 18,500 levy-supported starts since its introduction, the initiative, which is part of a government plan to create an additional 3 million apprentices by 2020, led to warnings from industry figures last year that employers would not be ready for it.
FSB national chairman Mike Cherry said that the changes in funding may be partly responsible for driving down the number of apprenticeships, which he described as “bad news for everyone”.
“It is early days in the government’s apprenticeship programme, but these figures do coincide with an increase in the compulsory employers’ contribution and a greater focus on levy-paying businesses over smaller employers,” said Cherry.
BPIF programme director Ursula Daly put the decrease down to an extension to the sign-up process but said that while apprenticeship starts in print may reflect the research, anecdotally enquiries were on the rise.
“The increase happened before the levy came in because everyone wanted to get signed up before everything changed,” said Daly.
“We definitely saw an increase and the drop since is reflective of levy payers still trying to figure out what they’re going to do. The government changed what is being delivered, the content, how it’s funded and with the introduction of new rules they have introduced a whole new criterion around how it is delivered. You can’t make that much change without creating an awful lot of nervousness.”
Daly, who has been instrumental in helping to shape the print industry's trailblazer apprenticeships scheme, said a number of employers had already expressed concern around the requirement for the 20% “off-the-job” training that comprises the new apprenticeship standard. She also said she fears the new system will favour more advanced degree-level apprenticeships and pay less heed to lower level courses, with the FSB also highlighting a fall in apprenticeships in the academic year 2016/17 for those aged under 19 and at intermediate level.
Gerard Heanue, Heidelberg UK managing director and recently appointed Picon chairman, highlighted two major issues with the levy: finding people interested in becoming an apprentice and learning how to use it through a service provider.
Heanue said: “The government has made it extremely complicated and difficult. We’re a large organisation and have an HR function to do this but if you’re looking at smaller businesses or manufacturers who haven’t got a dedicated HR function they are going to find it difficult to utilise the levy to bring in apprentices.”
Heidelberg HR manager Dalis Davies concurred with Heanue but said he believed things will improve as employers understand the work they must do with service providers.
Newly appointed Independent Print Industries Association (IPIA) chairman Mike Roberts described the results as “a crying shame”.
“If they are dropping off as a result of that [the Levy] then we’ve got to understand why and what we can do,” he said.
Leicestershire-headquartered print finisher Frip Finishing has a rolling apprenticeship programme and is about to take on three more apprentices across a number of its sites. While it is below the £3m wage bill requirement, it now has to pay a 10% funding fee to the BPIF to fund any apprentices it takes on.
“It’s not affecting our approach,” said managing director Les Gibson.
“The issue is how people now have to pay a fee where previously they weren’t having to pay anything. For the smaller organisations taking one or two apprentices, that is probably detrimental and that is probably the reason [for the drop in apprenticeship starts].
Elsewhere, Suffolk-based foil-blocking manufacturer Dies Direct recruits all its apprentices internally in order to give them a better wage and a longer timeframe, according to general manager Vic Britton.
“We had a few conversations with agencies asking us to take on apprentices under the levy and I said ‘no’ each time as it puts them on a really low wage, which is not what you want to try and encourage,” said Britton.